51) In 2010 Rosalva sold stock considered short-term for a gain of $875.00 and s

Question

51) In 2010 Rosalva sold stock considered short-term for a gain of $875.00 and stock considered long-term for a loss of $3400.00. She also had a $3000.00 short-term carryover from 2009 and a $1240.00 long-term loss carryover from 2009. a) What amount will be shown as a short-term gain (loss) for 2010? b) What amount will be shown as a long-term gain (loss) for 2010? c) Will there be a carryover for 2011? If so, what are the nature and amount of the carryover? d) Prepare Schedule D (Detailed stock information has been omitted: use reasonable assumptions.)

Explanation / Answer

51 In 2010 Rosalva sold stock considered short-term for a gain of $875 and stock considered longterm for a loss of $3,400. She also had a $3,000 short-term loss carryover from 2009 and a $1,200 long-term loss carryover from 2009.

a. What amount will be shown as a short-term gain (loss) for 2010?

$3,000 short-term loss carryover from 2009 - $875 gain for 2010 = $2,125 short-term loss for 2010.

b. What amount will be shown as a long-term gain (loss) for 2010?

$1,200 loss carryover from 2009 + $3,400 loss in 2010 = $4,600 long-term loss for 2010.

c. Will there be a carryover for 2011? If so, what are the nature and amount of the carryover?

There will be a carryover for 2011. Under section 1231 the limit is $3,000 placed on capital losses

So, Rosalva can carryover her short-term loss for 2010 of $2,125 and $875 of her long-term loss for 2010. The carryover for 2011 will be a $3,725 long-term loss carryover.

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